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    AME
    Earnings call· Sep 2025(Q3 FY25)

    AMETEK INC/ AME

    Oct 30, 2025 Source

    Executive summary

    AMETEK Q3 FY25 — Record Sales, Orders, and EPS with Strong Margin Expansion

    AMETEK delivered an outstanding third quarter, achieving record sales, orders, and EPS, driven by strong organic growth and robust margin expansion. The company is leveraging its distributed operating structure and operational excellence to navigate macroeconomic uncertainties, particularly in trade, while benefiting from positive inflections in Automation & Engineered Solutions and continued strength in Aerospace & Defense. Management is optimistic about future growth, fueled by strategic acquisitions and increased investment in organic initiatives.

    Highlights

    5

    • Record sales of $1.89 billion, an 11% increase from Q3 2024, driven by 4% organic growth.

    • Record orders of $1.97 billion, up 13% YoY, with organic orders up 7%, leading to a record backlog of $3.54 billion.

    • Record operating income of $496 million, an 11% increase, with operating margins (excluding acquisitions) expanding 90 basis points to 27%.

    • Record EBITDA of $592 million, up 11% YoY, achieving an outstanding 31.3% margin.

    • Record diluted earnings per share of $1.89, up 14% versus Q3 2024.

    Concerns

    3

    • Electronic Instruments Group (EIG) organic sales were flat in the quarter.

    • Organic sales in the Process market segment were slightly down.

    • Sales in Asia, primarily driven by China, were down mid-single digits due to trade dynamics and tariff renegotiations.

    Guidance & targets

    13
    CategoryTargetConfidence
    Full year sales
    up mid-single digits
    high materiality
    High
    Full year diluted EPS
    $7.32 to $7.37
    high materiality
    High
    Q4 overall sales
    up approximately 10%
    medium materiality
    High
    Q4 earnings
    $1.90 to $1.95 per share
    high materiality
    High
    Full year effective tax rate
    between 18% and 18.5%
    medium materiality
    High
    Full year capital expenditures
    approximately $150 million
    medium materiality
    High
    Full year depreciation and amortization
    approximately $425 million
    medium materiality
    High
    Full year free cash flow conversion
    approximately 110% to 115% of net income
    medium materiality
    High
    Full year organic sales for Process segment
    flat to down low single
    medium materiality
    High
    Full year overall sales for Process segment
    up mid- to high single digits
    medium materiality
    High
    Full year sales for A&D businesses
    up high single digits
    medium materiality
    High
    Full year organic sales for Power & Industrial businesses
    up low to mid-single digits
    medium materiality
    High
    Full year organic growth for Automation & Engineered Solutions
    mid-single-digit
    medium materiality
    High

    Segment performance

    12
    SegmentRevenueYoYQoQMargin
    Company-wide
    Achieved record sales, orders, operating income, and diluted EPS with strong margin expansion.
    Organic sales growth: 4%Acquisitions contribution to sales: 6 pointsForeign currency translation benefit: 1 pointOrders growth: 13%Organic orders growth: 7%Operating margin (ex-acquisitions): 27% (up 90 bps YoY)EBITDA: $592M (up 11% YoY)EBITDA margin: 31.3%Diluted EPS: $1.89 (up 14% YoY)
    		$1.89B11%—$496M operating income
    Electronic Instruments Group (EIG)
    Delivered outstanding operating performance with strong margin expansion, reflecting differentiated products.
    Organic sales growth: flatAcquisitions contribution to sales: 9 pointsForeign currency translation benefit: 1 pointOperating margin (ex-acquisitions): 30.4% (up 50 bps YoY)
    		$1.25B10%—$360M operating income
    Electromechanical Group (EMG)
    Excellent quarter with outstanding sales growth, record operating income, and sizable margin expansion, broad-based across businesses.
    Organic sales growth: 12%Foreign currency translation benefit: 1 pointOperating margin: 25.4% (up 250 bps YoY)
    		$646M13%—$164M operating income
    Process Market Segment
    Overall sales driven by acquisitions, strong pipeline activity, but trade uncertainty leads to slower decision-making. Visibility improving.
    Organic sales: down slightly
    		—low teens (overall)——
    Aerospace & Defense (A&D)
    Another excellent quarter with strong and balanced growth across commercial OEM, aftermarket, and defense markets.
    		—low double digits (organic)——
    Power & Industrial
    Delivered strong results, benefiting from grid modernization, electrification, and AI data center demand.
    		—mid-single digits (overall and organic)——
    Automation & Engineered Solutions
    Excellent quarter with broad-based strength, notable contribution from Paragon Medical.
    Orders growth: robust
    		—high single-digit (organic)——
    United States
    Broad-based strength across the region.
    		—mid-single digits——
    International
    Total international sales, with strength in Europe partially offset by Asia.
    		—low single digits——
    Europe
    Strong performance driven by Automation, EMIP, MAD, and Aerospace businesses.
    		—low double digits——
    Asia
    Driven by declines in China due to export issues and trade dynamics.
    		—down mid-single digits——
    Asia (excluding China)
    Positive growth when excluding the impact of China.
    		—mid- to high single digits——

    Operational metrics

    21
    General and administrative expenses
    $28Min line with last year's Q3
    Q3 FY25

    Essentially in line with prior year.

    Interest expense
    $23M
    Q3 FY25

    Reported interest expense for the quarter.

    Other expense
    $17.9Mincreased vs last year's Q3
    Q3 FY25

    Increase primarily due to one-time acquisition-related costs for FARO Technologies.

    Effective tax rate
    17.2%down from 18.8% in Q3 2024
    Q3 FY25

    Reduction driven by a lower effective international tax rate.

    Capital expenditures
    $21M
    Q3 FY25

    Capital expenditures for the quarter.

    Depreciation and amortization expense
    $103M
    Q3 FY25

    Depreciation and amortization expense for the quarter.

    After-tax acquisition-related intangible amortization
    $210M
    FY25

    Expected for the full year 2025.

    Operating working capital
    18.9%slight improvement from Q3 2024
    Q3 FY25

    Improved efficiency in working capital management.

    Free cash flow conversion
    113%
    Q3 FY25

    Strong conversion rate in the quarter.

    Total debt
    $2.5Bup from $2.1B at end of 2024
    as of Sep 30

    Increase due to the acquisition of FARO Technologies.

    Cash and cash equivalents
    $439M
    as of Sep 30

    Cash balance at quarter end.

    Gross debt-to-EBITDA ratio
    1x
    as of Sep 30

    Maintained conservative balance sheet.

    Net debt-to-EBITDA ratio
    0.9x
    as of Sep 30

    Maintained conservative balance sheet.

    Available credit and cash
    over $2B
    Q3 FY25

    Significant financial capacity and flexibility to support growth initiatives.

    Share repurchases
    $150M
    Q3 FY25

    Executed in the open market.

    Dividends paid
    $71M
    Q3 FY25

    Paid to shareholders in the quarter.

    Organic growth initiatives investment
    incremental $90M
    2025

    Investment focused on long-term success.

    Vitality Index
    26%
    Q3 FY25

    Strong index reflecting new product innovation.

    Price realization
    offset inflation and tariffs with a positive spread
    Q3 FY25

    Highly differentiated product portfolio allowed for effective pricing actions.

    IntelliPower backlog
    north of $25M
    Q3 FY25

    Backlog for uninterruptible power systems for data center microgrids.

    IntelliPower pipeline
    another $30M
    Q3 FY25

    Pipeline of opportunities for uninterruptible power systems for data center microgrids.

    Industry KPIs

    5
    MetricValueDetails
    Book to bill ratio1.04
    Orders bookings growth13%%
    M a acquisition contribution6 pointspoints
    Backlog by segment end market$3.54BUSD
    Data center exposure pipelinegrowing pipeline

    Orderbook & backlog

    1
    Total backlog$3.54BQ3 FY25

    record

    Product announcements

    3
    ProductTypeDetails
    IRIS AI Inspection cameralaunch
    Vector Digital Receiverlaunch
    Responder Enterprise Converge platformmilestone

    Deals & partnerships

    4
    FARO TechnologiesDesigns and develops 3D metrology and digital reality solutions, #1 or #2 in various niches. Excellent strategic fit with AMETEK's Creaform business.$920M

    Approximately $920 million deployed on the acquisition in Q3. Integration is progressing well, and the business hit its top and bottom line numbers for the quarter.

    VirtekLeading provider of 3D laser projection and quality control inspection systems for critical aerospace and industrial applications.

    One of the recent acquisitions that is integrating very well into AMETEK and delivering strong results.

    KernUnspecified, but part of recent acquisitions.

    One of the recent acquisitions that is integrating very well into AMETEK and delivering strong results.

    Paragon MedicalSingle-use and consumable surgical instruments and implantable components in attractive medtech markets.

    One of the recent acquisitions that is integrating very well into AMETEK and delivering strong results. Undergoing restructuring, over halfway complete, with cost structure reduction and new program wins.

    Risks & headwinds

    4
    Macroeconomic uncertainty

    ongoing trade conflicts

    Mitigation: Distributed operating structure and operational excellence culture allow quick reaction to changing market dynamics.

    Slower decision-making and delays in Process markets

    organic sales down slightly in Q3

    Mitigation: Strong pipeline of activity, improving visibility, cost structure well controlled, continued investment in new products.

    China trade dynamics

    Asia sales down mid-single digits (driven by China)

    Mitigation: Targeted pricing, strategic supply chain modifications, utilizing global manufacturing footprint, leveraging U.S. manufacturing presence to support global customers.

    Government shutdown

    not much of an issue so far

    Mitigation: Monitoring developments; currently a non-event but could become an issue if prolonged.

    What to watch in Q4 FY25

    5

    Process market organic sales

    next year (FY26)
    Currentslightly down
    Targetinflection to positive growth

    Why it matters

    Management expressed optimism for 2026, indicating a potential recovery in this segment which has been sluggish, impacting overall organic growth.

    I mean we looked at Process and Process improved just about everywhere sequentially on all the markets and all the geographies except China. So China was the one area that it didn't improve, and we got the tariff repricing negotiation going on. But everywhere else, it's on the right trend. So we're getting more visibility there. And I think that as that business comes back sometime in next year, we're really -- we have a business that's leveraged to succeed because the cost structure is really well controlled.

    Q&A highlights

    5

    Asked for a tour of key platforms and regions, noting Paragon's strong quarter and inquiring about tariffs' impact on China softness.

    Dave Zapico detailed performance across Process (low teens sales, organic slightly down), A&D (low double-digit organic sales), Power & Industrial (mid-single-digit organic sales, benefiting from data centers), and Automation & Engineered Solutions (high single-digit organic sales, led by Paragon). Geographically, U.S. was mid-single digits, Europe low double digits, and Asia down mid-single digits due to China, where tariff renegotiations cause delays.

    “Yes. I'd say what's driving is the tariff renegotiation of price. So the tariffs need to be renegotiated. They need to be included in the pricing and our Chinese customers are going back to the government entities and getting higher prices to pay for our products, and that's causing a delay.”

    asked by Deane Dray · answered by David Zapico

    2 min read5 chapters

    Detailed Narrative

    01

    Strong Operational Performance & Margin Expansion

    AMETEK achieved record operating income of $496 million, an 11% increase, with operating margins (excluding acquisitions) expanding 90 basis points to 27%. EBITDA reached a record $592 million, up 11%, with an outstanding 31.3% margin. This performance was attributed to the company's distributed operating structure and operational excellence culture, allowing quick adaptation to market dynamics and delivering excellent results despite macroeconomic uncertainties.

    02

    Strategic Acquisitions & Capital Deployment

    The company deployed approximately $920 million on the FARO acquisition, $150 million on share repurchases, and $71 million in dividends during the quarter. Recent acquisitions like FARO, Virtek, Kern, and Paragon are integrating well and delivering strong results. AMETEK maintains significant balance sheet flexibility with over $2 billion in cash and available credit, enabling continued pursuit of strategic acquisition opportunities from a strong pipeline.

    03

    Investment in Organic Growth & Innovation

    AMETEK plans to deploy an incremental $90 million towards organic growth initiatives in 2025, focusing on R&D, sales, and digital marketing. The Vitality Index stood at a strong 26% in Q3, reflecting successful innovation. New product highlights include Virtek Vision's AI-powered camera for real-time inspection, NSI-MI Technologies' Vector Digital Receiver for advanced RF/microwave testing, and Rauland's MedTech Breakthrough Award-winning Responder Enterprise Converge platform for healthcare communications.

    04

    Market Dynamics & Geographic Performance

    The company noted positive inflection in Automation & Engineered Solutions, continued strength in Aerospace & Defense, and a growing pipeline in Power businesses driven by secular trends like AI data centers. Process markets showed improved visibility, though trade dynamics caused delays. Geographically, the U.S. saw broad-based strength, Europe was up low double digits, while Asia was down mid-single digits due to China, though Asia excluding China was up mid- to high single digits.

    05

    Trade Environment Management & Pricing

    AMETEK continues to monitor the fluid global trade environment, implementing mitigation plans including targeted pricing, strategic supply chain modifications, and leveraging its global manufacturing footprint. The company's decentralized operating structure provides flexibility to adapt quickly, particularly in managing tariff renegotiations in China which are causing some delays in decision-making, though pricing has successfully offset inflation and tariffs with a positive spread.

    AI-generated summary of the company’s earnings call. Not investment advice.